financial records on millions of us citizens cftc. >> consumer financial protection bureau. >> not that i know of. but it is always the fbi but whether under a regular court or the fisa court. >> in the same for voice mail and text messages?

the cftc has what one official called a skeleton staff. and in an e-mail that got bounced back saying it would return when government reopened. other areas of loose focus, new mortgage rules and strict guidelines for nonbank financials. fed, treasury have been open but losing one agency for two weeks significantly sets back the clock on this. the treasury, ringleader, definitely has higher priorities. >> wow. thanks very much. diana olick, a stone's throw from capitol hill, but she found out the shutdown on home buyers reaches beyond the potomac. >> it's hitting rural home buyers hard. this is a relatively small group, it's a big problem for them. meet the malloy family. five kids, they sold their too small home in baton rouge and qualified for usda rural home contract. usda loans are no down payment, 30-year fixed product designed for families like them. when the government shut down, so did the loan program. last week with time running out, malloys had to act or risk being homeless. >> we had to do what we had to do. that's the decision

the cftc has not voted to bring charges or jpmorgan.ent on the why it has not happened? >> kayla is a great reporter. i cannot comment either any way on any ongoing investigation and i'm not even suggesting we do have an ongoing investigation with jp. when there's an appropriate time, if there's an appropriate time, we'll be first to let you know and i'll try to let you all know. >> can i pivot for a second and ask you as well, you mentioned the government shutdown. there has been very little attention on the fact that over the last week a major move in the derivatives market, which itself is a $600 trillion market, whatever figure you want to try to put on it, spear aheaded by the cftc talks about having a platform with more transparency but means it will have to comply with u.s. rules. will there be a move to push out time the length entities will have a chance to get involved or is all this playing out as you would hope? >> well, it's playing out sort of as i had hoped. we know what caused the crisis in 2008. it was these swaps, part

>> this is another example of the need of more robust funding for cftc and for cftc to be self funded. >> and finally, what are the implications of the federal trade commission, the agency in charge of consumer protection and privacy, closing its doors for an extended. of time? -- were extended time? -- for an extended time? >> there is not. >> kreblach. we disaggregate the government and see but it doesn't daily basis. i think you for the government. -- i thank you for doing what you're doing. >> i'm so glad you're here. like --cantwell would >> mine will be short. question that the ranking member asked. you don't want to give the crossways of the big issue we are dealing with here. the coast guard was not in any of those bills. noah was not in any of those bills. the satellites were not in any of those bills. i am happy to answer these questions because i think it is a good question. the assumption is those bills coming over, if i funded for every single one of those piecemeal bills you would still be out there today. the satellites would not be in the air. that is a fact. fair, the

. >> jpmorgan expected to pay $100 million to settle charges by the cftc over the london whale.lton says really it's not enough. he'll join us live right after the break. "squawk on the street" will be right back. >>> welcome back to "squawk on the street." it's all fun and games format l spaspace mattel today. barbie dolls posted their first quarter sales growth after four straight quarters of decline. hasboro up in sympathy on that move. hasboro reports its earnings next week. >> jpmorgan expected to settle charges related to the london whale trading disaster, but it will cost them about $100 million. earlier warren buffett talked about policing wall street. >> if a cop follows you for 500 miles, you're going to get a ticket. and believe me, you've had a lot of cops that have been following a long time and they're going to write some tickets. >> here for a cnbc exclusive is bart chilton, commissioner of the cftc. good morning. >> good to be with you. >> are you that cop following the car for 500 miles? >> we are that cop. even with the government shutdown, we're doing the best

justice department, the treasury department, regulators at the securities and exchange commission, the cftch is technically a separate part of government. >> reporter: that they are midgets. he runs the biggest bank in the world, the leading player, and he came out today and basically touted the president's line. liz: that right in there. he talked away. >> reporter: what did he say? liz: he is being diplomatic. >> reporter: he showed up and help the president out. they all did. if there was any conflict of interest, i write about when companies represent both sides of the deal. this is a conflict of interest, the president using people that he has guns to their heads and using them as political props for his side of this debate, whether you agree with publicans the democrats, take that out. anything that these guys said should be downgraded tremendously by the media. it does not matter. it is not the truth. they're saying. lines because they're afraid to say that it off. if you ask any of them they would say, mr. president, your economic policies are not working. you're attacking as every

there's been an agreement between the cftc and the europeans on better transparency. but at the end of last year total outstanding drif tifs amounted to $633 trillion of which only $24 -- 24 trillions, only, were traded on organized exchanges. the rest is huge. it really needs supervision and we need a speedy agreed derivatives reforms between the various markets. another danger zone is shadow banking. i'm sure you heard about that. it's attracting a lot of riskier activity. in the u.s., the nonbanking sector is now twice the size of a banking sector. and in china, half of the new credit that is issued, this year, has been extended through the shadow banking system. okay? so the shadow banking system, working on maturities but little in the way of supervision and regulation. there's been progress with the adoption of principles for proposals for regular latering securities, lending and repos. we're not saying shadow banking should be eliminated. it can be helpful. but it needs be a lot more transparent and much more overseen. f that's the delay. how about divergence.

his 700th home place or for leaving the cftc with you people to look for fraud immigration. the shutdown is jeopardizing numerous consumer protections and placing consumers have potential risk. thank you. >> thank you very much. one of the things that you make me think of is that uber using specific examples and i think the rest of us have been talking more about the general -- the overlay of the situation and of course always comes down to the individual science experiments that can't happen. one of the things our committee and before i call on senator whitaker -- that our committee has done this to compile -- you all had this in front of you. it's a committee report on the government shutdown and its 29 pages long. it could be 2900 pages long but it is a closer account or a human account of what is not happening. i ask unanimous consent that this report be made a part of the record. >> mr. chairman? this is a report by majority staff of the committee is that correct? i just haven't seen it so now i have no objection. >> i now call on senator wicker who doesn't look like se

. >> this is another example of the more robust funding and for the cftc to be funded in a way otherfinancial regulators are. what are the implications of the federal trade commission and privacy opposing an extended period of time and is their anyone able to negotiate? >> there is not. we just disaggregate the government. thank you. >> i'm so glad that you are here. [laughter] >> senator begich has a question and senator cantwell. >> just to be fair because i know it is a tough question that the ranking member asked and you don't want to get in the way of the initio but i want to assist in the answer to the question. for my friend from alaska, captain colburn, the coast guard wasn't in any of those bills, noaa wasn't so your permit wouldn't be solved and that was sent over to the house. ms. blakey, the satellites were not in those bills. i am happy to answer these questions because i think it's a good question because the assumption is by the bill's coming over magic happens and people get funded but if i voted for every one of those piecemeal bills they wouldn't be out today. the s

cftc. like rudy giuliani saying i want to you give me a campaign contribution good had was arranged? time ago. but the -- knowing that -- >> no. >> knowing this was going happen -- group, lobby group, they will go talk to, financial services, i can't remember the name of it. almost -- doesn't matter to me. that -- that meeting was going to happen a long time ago but happens as they are down here. and, you know, this is very public. just think about it. all he is guys, they are being used. lloyd blankfein, brian moynihan, jamie dimon, are being used as props in this spectacle. say what you want about either side of this. support the republicans, on their side, shutting down the government, the president wants, i don't care. the this is a huge story and in a sense these guys are suffering from stockholm syndrome. i'm surprised lloyd blankfein didn't start blinking in morse code torture. >> let's take a look at that. >> should the president negotiate on the debt ceiling? >> i would love to see

cftc alleges jpmorgan may have pushed down prices of related securities in hopes of improving portfolio. cnbc learned jpmorgan is denying manipulation, and indicating it plans to fight the charges rather than settle them quickly. one thing that put the bank off, i'm told, were commission's early demand for payments of up to $100 million and admitting wrongdoing. with much of staff away from work due to the shutdown, they have not convened a vote whether to sue jpmorgan and the situation is still unfolding. the stakes are ratcheting higher for both sides. >> our next guest wrote an op-ed in "the wall street journal" entitled the regulatory attack on jpmorgan feels familiar. hank greenberg, thanks for joining us. >> good to see you. >> why did you write this op-ed? >> well, for several reason. it had to be said, number one. and i think it's wrong to be attacking jpmorgan. after all, the government almost forced bear stearns on them. and he didn't want to do it. jamie didn't to want do, it but he did. now you sue him? doesn't make any sense. >> and they're talking about some of the claims

and cftc aren't. and i think the s.e.c.to do still to finish its derivatives regulation. >> let me ask you about that. i'm glad you started off with the derivatives regulation because on my panel here at the symposium, larry fink made a really interesting observation. he said, look at all of the glitches we've had. we had another glitch, by the way, today, at nasdaq. they said it was human error. so, i'll put that aside for a moment. but the flash crash. you know, you've done so many work on all of this. as we move more products onto public exchanges, are these exchanges equipped to actually handle all of the new business coming their way? this, of course, one of the new laws in dodd/frank. >> right. it's a huge issue, i think. the dodd/frank law required that most of the over-the-counter derivatives market will no longer be over the counter but directed on stfs, swap trading facilities of different sorts. it will be important as we concentrate risks in counterparties, like clearing houses and exact on exchanges, or trading

apparatus that involves the banking system 'em nails from this -- 'em nails from this administration, sec, cftcas you know, the head of the fed is appointed by the president, con the firmed by the senate. but there we go. that's what's going on right now, it's the white house out there. and i'll tell you, cheryl, i knew this was going to happen at some point. i got the feeling when lloyd blankfein was up there at the white house that he was all but blinking the words torture, you know? when he was, like, you know, sitting there saying how the republicans should give in and everything. [laughter] there he is, you see? torture? cheryl: i'm looking for blinking at the moment. okay. i see rich edson -- >> morse code, you know? jamie dimon, the ceo of jpmorgan chase came out yesterday, gave more happy talk about this, and this is a concerted effort, from what i understand, part of a cop certed effort by the white house to get the wall street guys to get out there. the more they talk about it, the more pressure they are putting on house republicans, essentially, to cave into any deal. at least that's

. >> cnbc learned jpmorgan is preparing to fight charges from the cftc as part of the london whale trades2 is essentially manipulated certain corporate derivatives notice. they filed a notice on september 16th, wells is likely to bring charges, in this case, potential manipulation charges over the london whale trades. jpmorgan had 14 calendar days to either respond in some way or to settle the case or risk being sued. i've learned jpmorgan opted to respond to this. they have denied they manipulated markets and are essentially laying the groundwork to fight this case if they need to. however, a settlement is still possible, mandy and brian, we'll see what the next move is. whether it ends up being a settlement or if they take a hard line and decide to sue. >> thanks for the breaking news. jpmorgan is kicking off the banking earning season this friday with wells fargo. >>> coming up next, the billionaire land grab. don't go away. checked bag with my united mileageplus explorer card. i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just ge

jpmorgan is denying charges by the cftc that it milt manipulated certain credit markets.he move suggests the banks is prepared to fight the regulator in court. jpmorgan stock is pretty flat in frankfurt. >>> and jury selection begins today in the fraud trial of five of bernie madoff's former employ employees. the group to have defendants includes mad i can't have's former secretary. they're accused of helping to hide madoff's ponzi scheme by making false statements and falsifying records for years. the government is counting on madoff's former finance chief as its key witness. the chile is expected to last five months. >>> and huj fund b.e. shores is reportedly closing its doors to new clients. the flagship fund generated a 20% return last year. the performance has been more modest since. the funds were closed earlier this year and the xos yif fund was closed this summer. many extra additional funded strategies have become less profitable. >>> coming up, call the i.t. guy. a week after it's launched the online health exchanges, the u.s. is still experiencing difficulties.

the cftc is expected to fine the banks's use of so-called manipulative devices. last month, jpmorgan paid $920 million to resolve the probe related to the trading loss. jpmorgan. jpmorgan stocks in frankfurt -- any moment now, i'm assured we will have it, 1.2%. >>> still to come, will rumors of a debt ceiling deal break rumors? spending will rise once the political uncertainty is removed. more after that in the second hour of "worldwide exchange" continues after this. i love having a free checked bag with my united mileageplus explorer card. i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just get on the plane and relax. [ julian ] having a card that doesn't charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u.s. when i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. ♪ >>> hello. you're watching "worldwide exc

>> yes, this is another example for more robust funding for cftc to be self-funded and the in the way that other financial regulators are. this includes consumer protection and privacy closing its doors for extended periods of time. is anyone able to investigate children playing on their children's ipads and i've had some cyberstalkers that could occur? >> there is not. >> which is the aggregate the government and we can see what it's doing on a daily basis. i thank you, mr. chairman, this is very important in thank you, senator. i repeat that i am so glad that you are here. >> just. >> senator begich has a question. >> one will be very short. it is a tough question. the ranking member has assets. we are in the crossways of a big issue and i want to assist the senator and the answer to his question. my friend from alaska, the coast guard wasn't in any of those bills. so your permits and your ability would not be solved to be in all fairness, i don't want to put you in the wrong view, i'm happy to answer these questions. the assumption is that magic happens and people get funded. but i

will see admissions that are more driven by straight facts, something like what the bank did with the cftcon't have the kind of intent elements that the class action people need to prove their case because, remember, the statutes that the government chose to bring these cases under are the, s&l era statutes. >> interesting. >> they used the proof burdens for the government but that doesn't necessarily means it eases the proof burdens for the class action folks. these will be helpful but not necessarily definitive. >> even before we had an administration in bed with the trial lawyers, we do know the obama administration is very close with the trial bar there is movement afoot in the obama administration to get banks and people they, the people that they cut these deals with to admit something, even in another era. class action lawyers did pretty well. isn't the class action aspect of this kind of a bigger risk now than it ever was before? >> it is clear that the class action bar is watching these things. they want to see what is going on and these will help them. there is no doubt. just a s

less than 2% of the fcc's staff is working in the cftc's which oversees the commodity market in the derivativesarket, the vast majority of the 700 employees are furloughed, leaving them with few people to police this for fraud and manipulation. the shutdown is jeopardizing numerous consumer protection and placing consumers or potential risks. i think you. >> thank you very much. one of the things that make me think of is that you're using specific examples. and i think that some require the overlay of the situation and it always comes down to individual science experiments that cannot happen. it's one of the things you all have this in front of you. it is a report on the government shutdown. and it's 29 pages long, it could be 2900 pages long. but it gives, you know, a more human account of what is not happening and i ask them to this report that this be made part of the records that mr. chairman. this is a report by the majority staff of the committee. >> yes. please go ahead. >> i have no objection and i think you. >> i now call upon senator risk wicker who does not look like senator john thu

we have already approached that with the cftc to use criminal actions if any of this kind of shenanigans happen again. but we are here, we are here to make sure that our banking system, that our economy, that has to work on the world's stage, has not a disadvantage. if you push out these commodity swaps, security swaps, we are doing a great disservice not just to the banks, but to our end users. you are going to take commodities and when you look at , mr. speaker, the commodities, these are things like aluminum. they are agribusiness products. 40 out of our 50 states, the largest part of their economy is agribusiness. let us take something like coca-cola. the coca-cola company who has to deal with aluminum for cans or pepsico la or any of those in our beverage industry, they have to mitigate their risk. if you push them out of where they have to do their business in the same bank, with interest rates swaps, and by the way, the interest rate swaps is the critical pivot swap to mitigate that risk. and you're going to push commodities out, you're going to push the farmers out, you're going

have the ability or access to voicemail content or the financial records on millions of us citizens cftc >> consumer financial protection bureau. >> not that i know of. but it is always the fbi but whether under a regular court or the fisa court. >> in the same for voice mail and text messages? >> in the targeting of the u.s. person all has to be done that way. and that would reticulate suspicion. >> ag general -- thank you general alexander. >> thank you, mr. chairman chairman. i understand the series of concerns and consequences of the intelligence programs furloughed as a result of the shutdown. to create consequences for our economy. but the answer to that is not to have a shutout in the first place but to have all of government. but we talked about some individuals that have passed inappropriate or illegal query's and general alexander my question is is how did they come to light in the first place? day you have something in place with these actions taken by your employees? >> before it goes up and makes a very quick to see. it is much more difficult oftentimes that is found when we

jp portionan to pay $100 million to settle with cftc.come as soon as this week. >>> also, apple reportedly told two suppliers of its low cost iphone 5c that it's reducing orders in the fourth quarter. that news raising concerns about weaker than expected demand for the new product. coming up when we return, we have much more warren buffett. plus, a squawk ceo call call with fred smith is taking on everything including the function of the united states and global economy. my mantra? trust your instincts to make the call. to treat my low testosterone, my doctor and i went with axiron, the only underarm low t treatment. axiron can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell

it's a potentially dangerous financial situation and the shutdown has put our watchdogs at the cftc andthe s.e.c. to sleep. global markets are open, wall street is open but investor protection agencies are closed. it's an open invitation to financial abuse. the shutdown is also putting the safety of our children at risk. christmas may seem far away, but companies are already working to get ready for the holiday seas season. they're shipping goods in from overseas, including millions of toys. during this shutdown, only 22 employees at the consumer product safety commission will be available nationwide. that's 22 people to inspect millions of imported toys and gifts, gifts that american families will be putting under the christmas tree. these agencies were created by congress to protect american investors and consumers, to help small businesses. it is a travesty that tea party republicans in the house have been allowed to hold the country hostage. madam president, that's unconscionable. real people are being hurt by this. the people who are going without pay, without veterans' benefits or

there has been progress, granted, a agreement between the cftc and the europeans about better transparency, but at the end of last year, deriff tips amounted to $633 trillion of which only 24 -- 24 trillion only -- were traded on organized exchanges. the rest are huge and it really needs supervision, and we need speedy agreed derivatives reform between the various markets. another danger zone is shadow banking. i'm sure you have heard about that. it's attracting a lot of risky activity. in the u.s., the nonbanking sector is now twice the size of the banking sector, and in china, about half of the new credit that is issued, this year, has been extended through the shadow danking system. -- shadow banking system. so shadow banking system, working on maturities, but with very little by way of supervision and regulation. there has been some progress with the adoption of principles for money market funds and proposals for regulating securities lending and reposts. for sure, nonbank financial enter mediation can provide a valuable alternative. so we're not saying that shadow banking should be el